When is a resignation ‘forced’?

Voluntary resignation or unfair dismissal?

So, if a worker is forced to resign, what are the implications for both employee and employer?

Under the Fair Work Act, an employee cannot make an unfair dismissal claim unless termination of employment is at the initiative of the employer.

However, if an employee can demonstrate that they had no effective alternative but to resign from their position, they are then entitled to proceed with an unfair dismissal claim. 

To demonstrate that a resignation was forced, it must be shown that the employer’s conduct was the principal contributing factor in the employee’s resignation.

In instances where it has been found that the situation constituted a forced resignation, the Fair Work Commission has allowed unfair dismissal claims to proceed – e.g. a 2012 case involved an employee who resigned from his position after being underpaid by his employer for approximately four months.

The FWC ruled that, in this case, reinstatement of the employee was not appropriate and the employer was ordered to pay compensation for the worker’s lost wages.

Overall, the Fair Work Commission notes that “the line distinguishing conduct that leaves an employee no real choice but to resign from an employee resigning at their own initiative is a narrow one”.

It is important to remember that context and details are important, and that the bar can be quite high for demonstrating that a resignation was forced.

As the team at Marshalls, Dents and Wilmoth explains, while “a failure to pay wages or superannuation may justify resignation…payment of wages a few days late is unlikely to be sufficient to establish” a forced resignation.